How to address problems and conflicts within the company? What will be the employer’s reaction when you present your proposals? How to collaborate with colleagues? Corporate culture addresses such questions.
Dynamic and highly competitive – this is the world of modern business. If a company wants to outpace the competition, it must focus on the values within the organization. And corporate culture is precisely the foundation for achieving this.
Every organization or business is seen as a whole entity within which a certain cultural system is applied.
Corporate culture, also known as organizational or corporate culture, is a sum of values, beliefs, attitudes, and norms that determine how members of the organization behave and collaborate.
It is an informal system of rules and customs that influences the work environment and the way goals and long-term successes of the company are achieved.
It can significantly impact employee motivation, productivity, job satisfaction, and overall organizational success.
If we were to characterize corporate culture professionally, we would use the definition from expert Zdenko Šigut: “Corporate culture always represents a certain character, the spirit of the company, internal rules of the game that influence the thinking and behavior of employees, as well as the overall atmosphere in which the entire internal company life unfolds.”
There are several types of corporate culture. According to one of the most well-known models (the Competing Values Framework), there are four main types:
| Types of corporate culture | Characteristics | Values |
|---|---|---|
| Clan culture | It focuses on people and relationships. Employees feel like they are part of a family-like environment. | collaboration, communication, shared goals, and mutual support |
| Adhocratic culture | It is oriented towards innovation and risk. It encourages creativity and experimentation. | flexibility, adaptability, entrepreneurship, and initiative |
| Market culture | It focuses on results and performance. It is highly competitive and aims to achieve goals. | results, efficiency, productivity, competitiveness |
| Hierarchical culture | It is based on stability, control, and effective management of processes. It has a clear structure and formal rules. | efficiency, consistency, predictability, adherence to rules |
Corporate culture has many benefits that can positively impact the organization and improve not only internal processes and relationships but also the external image of the company. It leads to long-term success and sustainability. What are some examples?
Corporate culture can also have disadvantages that can negatively impact the organization. Here are some of them:
While corporate culture can be a powerful tool for organizational success, it is important to regularly evaluate and adapt it to minimize potential disadvantages and maximize its benefits.
The connection between corporate culture and strategy is essential for achieving organizational success. The strategy sets long-term goals and direction. Culture creates an environment where these goals are achieved. Aligning them ensures that all employees share a common purpose, which increases motivation and engagement.
For example, if the strategy focuses on innovation, the culture should encourage creativity and a willingness to take risks. Additionally, a flexible culture enables the company to quickly respond to changes in the external environment and adapt to current conditions.
Building corporate culture is influenced by many factors, such as the industry, country of operation, and company size. However, the values, attitudes, and visions of the most influential people within the company who have the greatest impact on the rest of the organization play the most significant role.
Establishing a strong and positive corporate culture involves:
Creating culture can happen organically with the conscious involvement of company managers.
However, it is a long-term process that requires time, effort, attention, and interactions in the form of workshops or other collective activities between management and employees.
A dysfunctional corporate culture negatively impacts performance, morale, and the overall atmosphere within the organization.
It starts with a lack of communication. Information is not effectively shared, leading to uncertainties, misunderstandings, and a lack of alignment between teams and departments. It is also related to the absence of openness and transparency in decision-making processes.
Characteristics of dysfunctional corporate culture include employees’ distrust of leadership, and lack of support for growth and development, resulting in stagnation and a lack of innovation.
Employees don’t feel supported in their career growth which exacerbates unfair compensation practices.
Similarly, unhealthy competition instead of collaboration leads to isolation and a lack of team spirit. Employees focus on their interests rather than common goals.
All these examples of dysfunctional corporate culture create a negative workplace atmosphere that is toxic, with high levels of stress and harassment. This can have serious negative consequences for the organization, including decreased productivity, high employee turnover, low engagement, and a poor reputation. Identifying and addressing these issues is crucial for restoring a healthy and productive corporate culture.
A great example of the positive application of corporate culture is the retail chain Lidl. It is known primarily for its focus on efficiency, high-quality standards, and strong commitment to both employees and customers.
Lidl strives to be an attractive employer offering good working conditions, fair wages, and opportunities for career growth. Employees are supported through training and development programs. All of this also contributes to building the brand’s identity.
